Search

Funded by Norway and Sweden, the National Hydropower Plan Study will result in more dams being built in Vietnam, more rivers destroyed and yet more local people’s livelihoods destroyed. The beneficiaries are Swedish and Norwegian consulting firms.
By Chris Lang. Published in Watershed Vol. 5 No. 3 March – June 2000.

Late last year, an article published in the Bangkok Post newspaper questioned some of the assumptions being used to justify construction of the proposed Nam Theun 2 Hydroelectric Project. A month later, the Vientiane Times, the State-run English language newspaper in Laos, published a front page article in response that stated the Post article was, “part of a campaign by some organisations to use whatever strategies are necessary to oppose the construction of dams anywhere in the world, especially in developing countries”. Chris Lang profiles the National Hydropower Plan Study in Vietnam as an illustration of the campaign by some organisations to use whatever strategies are necessary to promote the construction of dams anywhere in the world, especially in developing countries.

Behind the decisions about whether or not to build dams is a web of actors: Northern and Southern governments, multilateral and bilateral agencies, academics, politicians and even nongovernmental organisations. Sometimes working in contractual partnerships, sometimes working independently of each other, they continuously generate studies, plans and projects that ensure that dams continue to get built. Together they help support dam-building companies: consultants, construction companies and machinery suppliers, who are the ultimate beneficiaries of dam-building through the lucrative contracts they receive to investigate, study, advise on, design and build dams. A clear example of the ways in which various institutions work to tilt the decision making process in favour of dam-building is the National Hydropower Plan Study in Vietnam.

A number of large dams have already been built in Vietnam. The country’s largest, the 1,920 megawatt (MW) Hoa Binh dam in northern Vietnam, was completed in 1994 and 58,000 people were evicted from their homes and land by Hoa Binh’s reservoir. On the La Nga River in the southern province of Lam Dong, construction of the Ham Thuan and Da Mi dams (472 MW in total and funded by Japan’s Overseas Economic Cooperation Fund) is approaching completion, while construction of the 60 MW Can Don project on the Song Be River began last year. In the Central Highlands, the 720 MW Yali Falls dam on the Se San River was recently completed – and its operations have reportedly caused the flooding of riverside gardens and other hardship for people living along the Se San River downstream of the dam in Ratanakiri province in northeast Cambodia. Meanwhile, construction of the 70 MW Song Hinh dam is nearing completion. In 1995 and 1996, village people who would be forced off their land by the project sent 60 separate petitions to the district authorities in an attempt to ensure that they would receive adequate compensation. The government authorities simply returned the petitions.(1)

Another project, the Son La dam, is proposed to be built immediately upstream of the reservoir of the Hoa Binh dam. The reservoir behind this 3,600 MW dam (designed so that the flood would reach the Chinese border over 200 kilometres upstream), would flood the homes of 130,000 people. On the Se San River in the Central Highlands, the Se San 3 dam is the subject of a Project Preparatory Technical Assistance (PPTA) study funded by the Asian Development Bank to prepare the project for construction. According to Vietnam’s Institute of Energy three other dams are proposed for the Se San River: Pleikrong (120 MW), Upper Kontum (260 MW) and Se San 4 (366 MW). Other proposed dams include Huoi Quang (600 MW, Da River Basin), Ban Mai (350 MW, Ca River), Dai Ninh (300 MW, Dong Nai River), Dong Nai 3 (180 MW) and Dong Nai 4 (200 MW).

These dams have been studied for the past 40 years or so, and the Government of Vietnam is selecting one, two or three at a time and then building them. According to consultants working on the environmental impact assessment for the Dong Nai dam in 1996, “The sites for 18 [hydro]power plants to be built early next century, with a combined capacity of 9,524 MW . . . are currently being selected.”(2) Yet in April 1999, a consortium of consulting companies began a two-year study to design a National Hydropower Plan (NHP) for Vietnam. Why a National Hydropower Plan for a country in which many dam projects, some of them very large and expensive dams, have been studied and are readily approved by the government whenever project funding becomes available? The actual purpose of the NHP Study is revealed by identifying some of the companies and government agencies involved in the study.

Planning business as usual

The US$3.24 million NHP Study is funded by the Norwegian Agency for Development Cooperation (NORAD) and the Swedish International Development Cooperation Agency (Sida), the overseas aid agencies of Norway and Sweden. The consortium of Nordic consulting companies doing the NHP study are SWECO International (Sweden), Statkraft Engineering (Norway) and Norplan AS (Norway). The consultants won the contract on the basis of a limited tender offered only to Swedish and Norwegian companies.

In recent years, Sida and NORAD have been instrumental in promoting dams in the Mekong Region. In Vietnam, Sida has provided funding for the construction of the Song Hinh dam, a masterplan for dams on the Se San River, an engineering/tunnelling training project on the Yali Falls dam, and studies for the proposed Son La dam. In Lao PDR, NORAD provided partial funding for the Theun Hinboun hydroelectric dam – the Norwegian utility company Statkraft SF and consulting company Norplan were also involved in this project.

Statkraft Engineering is a wholly owned subsidiary of Statkraft SF, Norway’s largest electricity utility, and is 100 per cent owned by the Norwegian government. Statkraft, in partnership with the Swedish electricity utility Vattenfall, owns 20 per cent of the Theun Hinboun dam which is the first dam either company has undertaken outside the Nordic region.

Norplan AS is a consultancy and planning firm, established in the 1970s, and hydroelectric projects form the largest part of its work. Norplan has produced power sector studies for Indonesia and Angola (funded by the World Bank and UNDP). Norplan also worked on the Theun Hinboun dam – the company did “supplementary studies” after the first EIA for the project (done by the Norwegian company Norconsult) was rejected by NORAD. However, construction of this dam had already begun by the time Norplan’s “supplementary studies” were completed. [See Watershed, Vol.2, No.2.]

SWECO International is owned by VBB Viak – the engineering firm that built many of Sweden’s dams. SWECO International was registered on the Stockholm stock market in 1961, and is the part of the SWECO Group (which consists of eight companies) that works outside Sweden. As a consulting company SWECO plans, designs, and supervises all stages of the development of dams, as well as other large engineering projects. In 1994, SWECO produced a feasibility study for the Son La dam. SWECO, in association with Statkraft Engineering, produced the Review of the Master Plan for Se San River in 1997, and the same two companies completed a feasibility study for the Se San 3 hydroelectric dam in 1999.

There is little doubt as to whether any of these consultants are dam-builders. And even less doubt as to what they will recommend in the National Hydropower Plan for Vietnam – dams, dams and more dams.

Mission: World Bank-able

The idea for the National Hydropower Plan came from the World Bank. Bank officials suggested the need for a hydropower plan to the Vietnamese Government. In February 1997, Van Tieng Hung, Operations Officer at the Bank’s office in Hanoi, stated that the Bank had refused to consider any funding for the proposed Son La dam until a National Hydropower Plan was drawn up for Vietnam – thus giving the Vietnamese Government a little more encouragement to think seriously about agreeing to a national hydropower study.

World Bank staff then contacted the Sida representative in Hanoi asking them to fund a study, according to Sida official Goran Haag, that would enable the Bank to find “bankable” hydropower projects in Vietnam. Bank staff also wrote the original Terms of Reference (ToR) for the study, although the ToR was subsequently rewritten by the Norwegian Water Resources and Energy Directorate (NVE).

The World Bank wields an enormous influence in Hanoi, influence gained not least because the Bank chairs the Donors’ Group meetings which every year offer Vietnam around US$2 billion in “aid”. Additionally, in the four year period after the US-led embargo on Vietnam was lifted in 1994, the World Bank’s International Development Association approved 19 projects in Vietnam worth a total of US$2 billion. In Vietnam, when the World Bank says there must be a national hydropower plan, it’s a good bet that a national hydropower plan will be produced.

But now that the NHP Study is underway, World Bank oficials are saying that the Bank will not fund any dam projects in Vietnam, in particular the Son La dam. In fact, Bank officials have suddenly started to describe the Son La project as “not a good idea”. In Vietnam, says Bank official Nisha Agrawal, “we are not in the business of power production . . . It’s an area we’ve gotten out of, basically.”

Yet “the Son La hydro plant appears promising,” at least from an economic perspective, according to a World Bank report, Fueling Vietnam’s Development: New Challenges for the Energy Sector, published in 1999. While the Bank might not directly fund dams, behind the scenes it will certainly continue to promote hydropower.

In October 1999, the NHP Study consultants produced a 1,600 page draft “inception report”. Egil Skofteland, NVE’s advisor to the NHP Management Board explained, “The complete Inception Report is available here in Vietnam for any stakeholder in both English and Vietnamese. It has also been submitted to the World Bank, the Asian Development Bank and NVE.”

Mistake-holders

The NHP Study will look at the future options for the Vietnamese Government in the hydropower sector. Only in the final phase of the study will the consultants analyse combinations of hydropower and other options for electricity generation, such as gas, coal, solar or wind power. The NHP Study will make no attempt to look at problems associated with existing dams in Vietnam or anywhere else in the world.

So what is the NHP Study for? Hydropower dams are going ahead in Vietnam regardless of the study. However, none of the dams proposed or under construction are economically viable without funding from international aid agencies. The Terms of Reference for the NHP Study states that one of the purposes of the study is to provide the “rigor and cross-sectoral approach that in recent years are required by international funding agencies”.(3) Meanwhile, “stakeholders” are to be included in the NHP process, and are defined by the ToR as “someone who has something at stake when a certain (governmental) decision inflicted on them has consequences for themselves or their legal rights”.(4) Before the consultants wrote the inception report, “stakeholder” involvement consisted of two meetings in Hanoi. The objective of the first meeting, according to the consultants, was to “inform the stakeholders about the Project, the methodology of the studies and the task for the stakeholders”.(5) The second meeting was held to “present the results of the coarse screening of the projects in the five river basins and the preparation for the next phase of the Study”.(6)

The consultants complain that the number of “stakeholders” – “more than 50” – is “very large”, even though the number of participants in the “stakeholder” meetings, including officials from the World Bank, Sida and NORAD, is a tiny percentage of the people that would be evicted from their homes by any one of the dams proposed. In fact, the consultants selected the projects for further study without even talking to any people living in the proposed reservoir areas.

“Stakeholders” are to be involved not because “project affected people” have a right to know that they are to be kicked out of their homes to make way for a dam, but according to the ToR, because the NHP Study will be “accepted by the stakeholders who will facilitate easier and more effective implementation of the plan”.(7) In other words it will be easier to get international funders to agree to fund dams if “stakeholders” have been involved in the study.

At least five Cambodians were killed after water was released from the Yali Falls dam. According to Egil Skofteland of NVE the ToR for the NHP study excludes study of such “accidents”.

In the draft Inception Report the NHP consultants list for further study 16 dams on four rivers; the Lo, Da, Se San, and Dong Nai. The institution in charge of overseeing the NHP Study is a management board consisting of people from the Son La Management Board – whose responsibilities include supervising the proposed Son La dam project through to completion. It is not surprising that the consultants for the NHP Study selected the Son La dam as one of the 16 projects for further study in phase two of the NHP process. The selection of projects provides an illustration of how accommodating the consultants are prepared to be. Originally the consultants selected five rivers, but none of the dams that had been previously proposed on the Ca River (including the Ban Mai dam) passed the consultants’ cost-benefit analysis. Not to be outdone, the Vietnamese Power Engineering Consulting Company No. 1 is currently looking for other possibilities to dam the Ca. The consultants therefore acknowledge that “one project in the Ca River basin, tentatively named ‘Ban Mai Substitute’, will be included in the list of projects for further studies.”(8)

A Selection of Dams: With the compliments of Sida and NORAD

Sida and NORAD have funded a series of dams around the world, in Chile, China, Ethiopia, Kenya, Laos, Sri Lanka, Tanzania, Venezuela, Vietnam and other countries. Sida states that, “The overall aim of Swedish development cooperation is to improve the living standards of the poorest groups of people.” Yet Sida also estimates that up to three-quarters of the money it lends for hydroelectric dam projects goes to Swedish companies.

Sida- and NORAD-funded dam projects include:

Pangue dam, Chile. The first of a proposed series of dams on the Biobío River and funded by both Sida and NORAD. Access roads to the project site have led to accelerated logging in species-rich forests. The project has been vigorously opposed by the indigenous Pehuenche people.

Muela dam, Lesotho. Sida funded this project, itself part of the huge Lesotho Highlands Water Project. The project hit the headlines in August 1999 after the Lesotho Government accused the former Chief Executive Officer of the Lesotho Highlands Development Authority of taking US$2 million in bribes from ten companies and two consortia.

Pangani dam, Tanzania. This Sida/NORAD-funded project intended to boost output from an existing dam, but due to extraction of water for irrigation upstream, water flow in the dry season is likely to be insufficient to run the plant at full capacity.

Kihansi dam, Tanzania. Due to be completed by the end of 1999 and receiving funds from Sida and NORAD, the Kihansi project area includes two of Tanzania’s protected areas: a regional forest reserve and a national park.

Epupa dam, Namibia. With funding provided by both Sida and NORAD, the 295 square kilometre reservoir behind the Epupa dam would flood homelands of the Himba people. The Himba travel around a wide area with their cattle, sheep and goat herds, relying on the Kunene River during the dry season. Their livelihoods and social organisation would be permanently destroyed by the dam.

Aid for whom?

For the consultants, the NHP Study is an important process. By performing their roles in the Study, they will get to know the institutions and the people in Vietnam who are responsible for the decisions about planning and building dams. A 1991 report by NORAD explains, “As a result of development aid, several Norwegian companies gain good international contacts and better knowledge of international terms. The development aid opens doors, both for the Norwegian industrial sector as such and for individual countries to markets and partners that will be of great importance for ordinary business as well. One example of Norwegian involvement in the development aid sector creating this kind of positive consequences is the participation in the hydropower sector in China and Vietnam.”(9)

The NHP Study consultants will be in a good position to lobby for future work in Vietnam. As part of the Study, the consultants will recommend dams that should be the subject of further study, and they will no doubt then attempt to win the contracts to do the further studies themselves. This is an obvious conflict of interest. The more dams the consultants recommend for further study, the more potential work there is for dam-building consultants such as themselves. If, on the other hand, the consultants were to recommend that no more dams be built in Vietnam, then they would be unable to work in Vietnam in the future. In February 2000, Egil Skofteland, NVE’s advisor to the NHP Management Board said, “Since the number of potential hydropower projects proposed to be analysed further is much higher than anticipated at the start of the Study, the Client is just now in the process of preparing a final response to the Consultant’s Inception Report.” Skofteland explained that Electricity of Vietnam (“the Client”) requested that the number of projects to be studied further should be increased. He added, “This is based on a professional discussion between the Client and the Consultant on the methodology leading up to which projects are considered viable.” The consultants subsequently recommended that the NHP Study be extended by six months, with a US$700,000 increase in budget to further increase their profits.

3. Norwegian Water Resources and Energy Directorate, Letter of Invitation (LOI) to submit proposal for Consulting Service for
the Stage 1 of the National Hydropower Plan (NHP) Study, Vietnam. 28 September 1998.